Peer39 Wins Support From Venture Community for Non-Cookie-Based Ad Platform

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Privacy advocates have long been up in arms about cookies—those data packets that store information about you in your browser, and that have become the basis of some technologies that allow companies to market directly to you. So a couple of years back, the venture community began looking for technology developers who had new approaches to helping advertisers find their target audiences on the Web, and who weren’t using cookies or anything else that might smell like an invasion of privacy.

Among the companies that caught the attention of VCs was Peer 39, a New York-based startup that uses semantic analysis—not cookies—to find the most appropriate settings for marketers on the Web. In late May, Peer39 raised $5.2 million in a Series D, bringing its total venture haul to $27 million. “What they offer is precise targeting, without raising concerns about privacy and safety,” says Warren Lee, a venture partner with Canaan Partners, which first invested in Peer39 in 2007 and was part of the recent round.

Peer39 was founded in Israel in 2006. The company started as an ad network, but shifted its model in 2009 to focus entirely on selling the technology it had developed to help advertisers optimize their ad placements by quickly scrutinizing the words on every Web page. The U.S. headquarters, where the executive team is based, opened three years ago. The R&D office remains in Petach Tikva, Israel.

Peer39’s technology is based on three key capabilities. First, it can distinguish between a content-rich page—such as a reported story on Xconomy (excuse the plug)—vs. something boring, like a login page for a password-restricted site.

Then it provides advertisers the ability to target categories of content, such as personal finance, parenting, or autos. “We’re able to look at billions of page impressions in any given day and say, ‘This page is about this particular class of cars and trucks,'” says Peer39’s CEO Andy Ellenthal, who was a veteran of DoubleClick and several ad-tech startups before he joined the company in 2010. “That’s fundamentally interesting to a lot of buyers.”